Best Ways to Invest money in 2020

The government issues T-bills also known as treasury bills to raise capital for public projects. T-bills are a form of debt and the government pays interest to the T-bill holder in exchange for their money.

The T-bills have a 20 to 30-year long maturity and the interest payments are made semi-annually. The T-bills can be bought and sold at any time during their life at its current market price. The investment is risk-free because it is safe with the U.S government. 

The S&P 500 index is one of the safest ways for new investors to enter the stock market. The listed companies are huge corporations that have been in the business market for a long while. 

Buying stocks and bonds of such companies are a safer investment with low-risk. The gradual growth in share price and regular dividends over time are the most attractive features of this 2020 investment.

The stock market has been shaky during 2020 due to the pandemic which has created great opportunities for buying stocks. Shares of many great companies have been selling at record low prices since the market took a 9.5% dip in March.

If you don't want the high risk associated with equity markets, consider investing in fixed income securities such as bonds (corporate and government) or bank deposits.

Bonds pay a fixed rate of interest on your income (usually twice a year). There is some capital appreciation/erosion in bond prices as well, but it's far from what we observe in equity markets. Summarily speaking, the prices rise when interest rates fall and vice versa.

If you want absolutely no volatility, invest in a bank fixed deposit. You might also find tax-saver deposits that can give you some marginal relief on your income tax.

The best place to invest money is the stock market but remember it is also the riskiest place to invest money. If you have a couple of thousand dollars and you don’t want to invest in the stock market, you can invest money in a 401k retirement account, buy property, buy a car and rent it out, or start forex trading.

If you don’t want to take any risks with your savings, it is better to convert your cash to gold because as inflation rises, the money is devalued.

Having gold instead of money is a widely used inflationary hedge. Holding gold instead of cash is better because what you can buy today with 100 dollars will not be selling at the same price 3 years later. The gold prices rise every time the money loses its worth. 

Warren Buffet aptly explains – “Compound Interest is the 8th wonder of the world.” You don’t need to be a millionaire to start investing. Start small and watch your wealth grow. Investment comes with some inherent risks, though. Be sure to recognize your risk appetite beforehand. Do some research and be cautious not to get carried away by hearsay.

Investing in equity markets is a high risk, high return game. You invest in stock of a company through an exchange such as the NYSE in the US or the Nasdaq Stockholm in Sweden. When you purchase shares of a company, you become its shareholder entitled to a share in the profits (dividends) of the company, and you also benefit from the price appreciation of the stock.

If you're a beginner, be sure to keep your eyes wide open. Markets can be quite volatile, so seek professional advice.

The smartest investors, especially who have just ventured into the investing world, will be better off letting professionals handle their money.

We speak, obviously, of mutual funds. Mutual funds are funds established by Asset Management Companies that appoint an investment manager with strong investment acumen to invest on your behalf.

Mutual fund schemes are available in ample options (debt, equity, arbitrage, etc.). Buy "units" of the fund, and let professionals take care of your hard-earned money for a small fee.

If the purpose of your investment is to build a retirement corpus, look for investment products specifically tailored to provide retirement benefits. These could be a provident fund, pension fund, or anything else that promises a consistent income after your retirement.

One thing to keep in mind when you invest for retirement is that you should go for low risk options. It's counter-intuitive to invest your retirement fund in volatile investment vehicles.